Legislation to do away with the health insurance premium subsidy available to state retirees opens a new front in the battle between legislators determined to cut the state’s retirement debt and unions representing state workers.

“It would wipe out retiree health care entirely for retired state employees,” said Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees, the largest public worker union.

The amendment to Senate Bill 1313 would eliminate subsidies for health insurance for retirees. Instead, the Department of Central Management Services would determine how much the state would contribute to “the basic program of group health benefits on behalf of retired employees, annuitants and survivors.” […]

“This is another place where the state is spending money and it’s important as we go through the whole budget debate to look at each one of these situations and determine if that is the best way to go forward,” said Madigan spokesman Steve Brown.

The subsidy is essentially written into the union’s contract, but that contract expires this year and doing away with the subsidy would likely kill it off.

* Related and a roundup…

* ‘A lot of angst’ among teachers over pensions: Most details about the plan are unclear at this point, but the most worrisome part of the proposal for teachers is a provision that would require educators to be 67 years old in order to retire with full pension benefits.

* State Legislators Question State Officials on Animal Disease Lab Closure: “I’m against all the closures because after all is said and done, I think the total amount of dollars that we’re going to earn by closing is $100 million. What is $100 million in jobs, and making things unsafe, and not being able to set the services for the people of this state, for them to come here, to come back home, and for us to run and take our test out of the state, and on and on, it’s just kind of like a circle”, said Cavaletto.

So, State employees shouldn’t run out the door to retire, but instead stick around so we get our health insurance if we agree to the “new” pension plan..but on the other hand they are working to eliminate retiree health care…someone please explain this to me, because at this point it sounds like NO health care no matter what you do once you retire…am I missing something?

“Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

It doesn’t say “pensions” cannot be diminished, it says “benefits” of a “retirment system.” And the federal contract clause backs this up. Money for the lawyers, anxiety for the retirees, no benefit to the State.

The health insurance after 20 years was implemented to stop the State’s brain drain. If you stayed 20+, you got the insurance when you retired. That was, at minimum, an implied contract and, give that it became a statute, it is a written one. They’ve always said they could change it but it would be an after the fact change, which is considered illegal under contract law.

I wouldn’t have a problem contributing something more towards my health insurance but the numbers they come up with are just ridiculous and inconsistent from one source to another. According to the State, they pay something like $1,087 a month towards my insurance. According to a Health Alliance statement published in the SJ-R, the State pays about $480 per employee under their contract. That’s a $600 difference.

The whole point of a group health plan is to provide an average cost to everyone under the plan. Young, old, healthy, sick … all pay the same premium. From previous statements, it sounds like the State wants to selectively decide who pays the group rate and who pays the individual rate … and they are going to make the retirees pay an individual rate. Sounds like an opportunity for a class aciton lawsuit under one of the age discrimination laws … except that sinc eyou are a State employee, you have to sue under the State’s law (not Federal) and the State gets to decide if you have a case. The whole thing is rigged from the git go …

Has anyone checked to see if this violates the ACA rules that you can’t change / drop things until the ACA is fully effective? (Remember, that’s part of th eproblem Illinois is having with Medicaid?) And what happened to the large financial subsidy the State got from the Feds the last two years under ACA to maintain health insurance for early retirees? (Rememebr, we all got a letter last year telling us the State got the money!) What about the waiver the State applied for to postpone the State health insurance being affected by ACA until 2018? Lastly, what about the promise that “if we liked our health insurance, we could keep it” under ACA?

With the Legislature exempting themselves and the judges, this is one more example of politicans “do as I say, not as I do”. Time to propose a Constitutional amendment that the law also applies equally to our elected officials!

On the other hand, this whole thing is a gift to the unions and retiree associations to raise funds …

“at this point it sounds like NO health care no matter what you do once you retire”

Actually, it’s more like “no health care unless you wait until you are eligible for Medicare before you retire.” That, I suspect, is the real intention — to raise the normal/average retirement age to at least 65 either directly (by changing the pension eligibility criteria) or indirectly (leaving current pension rules as they are but imposing health insurance conditions that will prevent anyone in their right mind from retiring before they can get Medicare).

I might have missed something here, but are they talking about early retirees (under Medicare age) or ALL retirees? Seems they are talking about everyone! Except of course themselves, and the judges who might possibly rule on it.

The choice is clear here, given finite dollars and no appetite for another overall tax increase: either cut state’s contribution to public employees’ health care or cut more from poor sick folks’ Medicaid.

The health insurance was really the only “carrot” Quinn had in getting employees to consider moving to the new plan. And, of course the new plan is where all the state’s savings are. So, something that highlights how tenative health insurance benefits really are probably does not help the cause.

If you go read some of the Civic Commision studies, the major complaint (as I read it) is the high cost of about 68% of State retirees selecting the Quality Care program over one of the managed care programs. A much simpler solution would be to just eliminate the Quality Care program and have everyone move to managed care … just like the STate is talkign about to get Medicaid savings.

But that would mean the STate would have to pay insurance premiums every month to the HMO’s … something the State is not in the habit of doing for a large amount of their health insurance claims … and that would blow a 9 to 15 month hole in the health financing that the State uses to keep afloat.

I personally have no problem paying a reasonable premium as a retiree, example: same as active worker. I’ve said this before.

What I actually resent is being a month away from retiring after 36 yrs t now be told ‘lady maybe you won’t get any or maybe we’ll take your whole pension check worth out for premiums’ (and all the while of course I know it affects not any of the people in the GA voting on SB1313HA6)….I played by the rules all these yrs and now they want to yank the rug out from under me. So what now? Just keep working until I die?

Having viewed the Mercy (sp?) report from a yr ago and studying the COGFA FY13 report on insurance, I really don’t see why they feel they must charge ridiculous premiums. The numbers they’ve been threatening with and/or trying to push are out of bounds with what the reports indicate necessary.

Perhaps with more government retirees facing the full cost of health care insurance like the rest of us, we’ll see more and consistent pressure on government to stop caving in to the demands of health insurers, care providers and the lawywers.

Cindy I’m with you. I wanted to work another year but will retire within weeks or months. I’ve got over 27 years in, all in good faith and to change the rules in the last 2 minutes of the game kinda sucks. I don’t mind contributing towards my health insurance either, but I sure as hell don’t think I should pay the same amount as that top school official bringing home $267,000 on his pension when mine will only be $24,000. Let’s make it graduated, let’s move retirement age to 62 when folks can get fed insurance, let’s be reasonable and not stick it to the folks who have hung on for decades (some of us not getting raises for 7+ years!!).

Yeah, I know that … but that’s only for the ones who left the State permanently. The snowbirds can get their regular checkups, etc. when they are here in Illinois and just have their mail order prescriptions forwarded … and when out of State in FL or TX or wherever durign the winter, they do still have emergency services … it’s just “routine care” they don’t have.

Besides, there is nothing to say whoever negogiates or specifies the health insurance bid specs can’t include out of state coverage as a criteria … can we say reciprical coverage between Blue Cross affiliates or somethign similar? It could be done but the whole helath insurance game in the past has focused on state by state control instead of one national program.

Assuming the National Health Care program stays in place, everyone will be covered by one form of group insurance or another. This will bring rates down for everyone, including retired and current state employees.

Don’t confuse the issues of health care availability and health care financing. This is purely a health care financing matter. My solution is that everyone pays at least 25% of their health care insurance costs - even legislators, state employees, judges, elected executive branch folks.

Also, we have to stop the early retirements options that allow healthy 55 year olds to retire and enjoy pension benefits for the next 35 years, other than law enforcement and corrections personnel.

Lastly, we have to start taxing seniors. Currently, pensions and annuities are not subject to state income tax for amounts over $50,000. We even have an IL Dept. on Aging, yet seniors pay virtually no state income taxes!

And of course, state government has to meets its obligations by more fully funding the existing pension systems. No nonsensical promises, just DO IT!

Ok, AA, I’ll sound cold hearted, but I don’t intend to leave the state upon retirement. My family has been in this state a long long time. I’ll still be right here, hopefully with my HMO health care and spending what little I have left of any pension in Illinois. I guess if I chose to leave and was left no option other than QC I could expect to pay more for that choice.

– Second is health care coverage (large carrot). Suppose you are entirely out of the State health care system. Medicade/Medicare would increase.

– Finally is the COLA (large carrot). The courts in a few states with constitutional provisions for pensions have ruled the COLAs are not included. Colorado being one. 3% a year is large. $25k increase to more than $32k after 10 years.

Then it was apparently “better the enemy you know” … now it’s turned out they didn’t know the enemy within.

If the union had any guts, they would endorse and finacially support Madigan’s GOP opponent or sponsor a write-in … just to send a message. OK, the GOP is most likely the enemy but at least you know where he would be coming from and not be betrayed.

Heck, maybe every State employee, teacher, professor and retiree should send a campaign contribution to the GOP candidate … money buys elections in Illinois.

I disagree. There is nothing the hodgepodge of ACA to actually bring down average health care costs. The mandates will just increase costs. The way that turkey is structured the only thing they can do to save money is ration care …

It’s unconsionable that the general assembly is not included in the retiree health bill. Also, just because it’s legal to strip retires of “free” health benefits doesn’t mean it’s ethical. There’s that dang e-word again that we don’t understand in IL.

The provision in SB1313 that CMS set the state’s contribution rate annually would be subject to politics, subterfuge, sleight-of-hand, shenanigans, duplicity, chicanery, connivance and collusion. In this fast-changing world, at least we can count on this much.

… (Health care is) a separately negotiated benefit by the unions. Many SURS retirees are academic, professional and administrative people who were not members of a union. I doubt that their benefits were negotiated by a union.

It sounds to me as though early retirees will have access to the state’s health insurance program but the retirees, or a subset of them depending, perhaps, on income, will have to pay more than they do now. Ditto the state’s Medigap policy for retirees who are Medicare recipients, I guess it will be there for all but more costly for some. This doesn’t seem unreasonable.

However, this is only one of the opening salvos in at least two negotiations-the AFSCME contract negotiations and the overall budget negotiations. We are far from anything certain.

As to medical costs, of course they are going up. Because of amazing technological advances in recent decades, medicine has a lot more to offer.
It was never going to be cheap but we wouldn’t want to roll back the clock either. An affluent society should expect to pay more for health care-probably, a lot more.

I think it is unconscionable that they would change the rules for people that have already retired, and even for those about ready to retire. People made financial decisions based on a certain set of assumptions. To change those assumptions after the fact is borderline criminal to me. That is what is unreasonable @cassandra.

I think it is unconscionable for children to crammed into classrooms with 40 others so that teachers can be retired for 30 -40 years, a long portion of which they will be receiving more $ than when they were working.

Carlos, that’s very a dramtic touch, but I’m not a school teacher for starters. Secondly the expected life span in the US is 78. Sure some make it much longer, but it is what it is, 78. I’m not ‘expected’ to draw a pension any where near even 20 yrs, let alone 30 to 40 nor will I be making more money in retirement than when employed. Don’t put me in your neat little handbasket.

I am glad to see amendments have been filed so the bill will affect Legislators and Judges as well if passed. However, the fact remains Legislators have a ridiculously generous pension. Capitol Fax mentioned the other day that if Madigan hangs around a little while longer before he retires, his pension will be 130% of his current salary. 130 percent!?! Who gets a 30% raise when they retire? With a bump like that he can afford to pay his health care while many retirees would struggle. If the Legislators want me to truly respect their efforts to fix the mess THEY made, they better start cleaning in their own house!

Disclaimer: I am pretty certain the 130% number is correct.I know it was more than 100%. Tried to find the Cap Fax post on this which included other information on Legislative benefits. If anyone knows the date - please post!

No one has mentioned it yet, but a likely side effect of the crisis caused by the pension “crisis” is that many of those public employees rushing to the exit door will be returning as contractual employees.

I still don’t see how they get around changing a State statute retroactively that people retired under. It was in writing that a SERS retiree w/20 years would get the health insurance free; if that isn’t a written contract (and a benefit upon retirement), I don’t know what is … and you can’t change written contracts retroactively.

And…where’s the outcry from the unions members and the leadership, and the many organizers who went out of their way to join their brothers in Wisconsin to protest the policies of the Wisconsin Gov. Where’s the indignation, the shouts, the signs…etc. Oh, I forget, Gov. Quinn, Cullerton the Pres. of the Senate, and Speaker of the House Madigan are all Dems.

The race to the door to reture early has already begun. to be expected. What teacher bashers did not count on is the “larger than usual” exit of young teachers (particularly those without tenure), leaving because they’re re-thinking the profession. Illinois will become like Florida…………even a high school grad can teach! But that’s apparently how much value folks are placing on their own children’s lives and educations. So, I guess they deserve what may happen.

Fifty kids per class? Sure, why not? It’s the MONEY isn’t it? No one cares about quality, experience, LEARNING opportunities, perhaps? Isn’t that what all this insanity is about? Money? Current proposals for cuts to teachers (increased contributions from salary to TRS) will, no doubt, impact the classroom. But we have to think about containing costs,right? Not worry about the kids!

Word, I went to St. Eulalia in Maywood, IL for grade school. My wife thought I as full of BS about class size until my mom pulled out the scrape books for my brother and me. From 1st grade on, 50-60 kids per classroom two classes per grade. Had over 120 in my 8th grade graduating class, two teachers. Whole lot of those people have done very well.

For whatever reason, maybe the strict discipline (the George Carlin routine about growing up Catholic is 100% true!), the Catholic schools turned out mostly success stories. You didn’t cross the nuns (a Marine DI was softer) or you were out of there. Plus they were into very progressive teaching techniques in the 50 and 60’s, things like machine assisted speed reading (50 years later I can still visualize that moving white bar), standarized testing, etc. … far ahead of the curve compared to the public schools. You were expected to excell …

And most importantly, they could kick you out……………a luxury the public school system does NOT have! Catholic school parents also backed up the discipline policies in the school. Public school parents threaten lawsuits.

Word, relax. Your quote was ‘I doubt it was common that Catholic Schools routinely had fifty students in one class.’ Well the fact is it was very common. Not saying it was right or that is the way it should be. That is just the way it was. As we moved around the country, our kid’s classes ranged from 20’s to about 40. Our daughter’s senior year had 1,200 kids graduating.

The Constitution clause does say “any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which
shall not be diminished or impaired.”

It seems that at least with SURS, health ins for retirees is part of a retirement system.

Legislator’s should start with themselves first. They need to have their retirement reviewed and maybe get paid what they are worth. Put the access money back in retirement. They can afford it more than the average person can. Thanks.

Legislator’s need to start with themselves. Like pay them for what they are worth and put that money back into retirement. Also they need to mess with their retirement systems too. They can afford it more than we can. Thanks. Robin

==It seems that at least with SURS, health ins for retirees is part of a retirement system.==
It’s not a benefit of SURS (or any of the pension systems). It’s created by statute outside of the pension systems. It’s a benefit for SURS retirees, but it’s operated wholly outside of the pension systems. (Which means it can be changed.)